Contrasting Rithm Capital (NYSE:RITM) & Sabra Health Care REIT (NASDAQ:SBRA)

Rithm Capital (NYSE:RITM) and Sabra Health Care REIT (NASDAQ:SBRA) are both mid-cap finance companies, but which is the better stock? We will compare the two companies based on the strength of their valuation, earnings, dividends, risk, profitability, analyst recommendations and institutional ownership.

Profitability

This table compares Rithm Capital and Sabra Health Care REIT’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Rithm Capital	15.55%	18.04%	2.63%
Sabra Health Care REIT	7.83%	1.87%	0.97%

Analyst Recommendations

This is a breakdown of recent recommendations for Rithm Capital and Sabra Health Care REIT, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Rithm Capital	0	1	8	0	2.89
Sabra Health Care REIT	0	2	7	0	2.78

Rithm Capital currently has a consensus target price of $12.67, indicating a potential upside of 18.94%. Sabra Health Care REIT has a consensus target price of $18.11, indicating a potential upside of 0.51%. Given Rithm Capital’s stronger consensus rating and higher possible upside, equities analysts plainly believe Rithm Capital is more favorable than Sabra Health Care REIT.

Valuation and Earnings

This table compares Rithm Capital and Sabra Health Care REIT”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Rithm Capital	$2.44 billion	2.11	$622.26 million	$1.50	7.10
Sabra Health Care REIT	$647.51 million	6.52	$13.76 million	$0.21	85.81

Rithm Capital has higher revenue and earnings than Sabra Health Care REIT. Rithm Capital is trading at a lower price-to-earnings ratio than Sabra Health Care REIT, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Rithm Capital has a beta of 1.8, suggesting that its stock price is 80% more volatile than the S&P 500. Comparatively, Sabra Health Care REIT has a beta of 1.26, suggesting that its stock price is 26% more volatile than the S&P 500.

Dividends

Rithm Capital pays an annual dividend of $1.00 per share and has a dividend yield of 9.4%. Sabra Health Care REIT pays an annual dividend of $1.20 per share and has a dividend yield of 6.7%. Rithm Capital pays out 66.7% of its earnings in the form of a dividend. Sabra Health Care REIT pays out 571.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Rithm Capital is clearly the better dividend stock, given its higher yield and lower payout ratio.

Insider & Institutional Ownership

44.9% of Rithm Capital shares are held by institutional investors. Comparatively, 99.4% of Sabra Health Care REIT shares are held by institutional investors. 0.4% of Rithm Capital shares are held by company insiders. Comparatively, 1.1% of Sabra Health Care REIT shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Summary

Rithm Capital beats Sabra Health Care REIT on 12 of the 16 factors compared between the two stocks.

About Rithm Capital

Rithm Capital Corp. operates as an asset manager focused on real estate, credit, and financial services. It operates through Origination and Servicing, Investment Portfolio, Mortgage Loans Receivable, and Asset Management segments. Its investment portfolio primarily comprises of mortgage servicing rights (MSR), and MSR financing receivables, title, appraisal and property preservation, excess MSRs, and services advance investments; real estate securities, call rights, SFR properties, and residential mortgage loans; consumer and business purpose loans; and asset management related investments. The company qualifies as a real estate investment trust for federal income tax purposes. It generally would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders. The company was formerly known as New Residential Investment Corp. and changed its name to Rithm Capital Corp. in August 2022. Rithm Capital Corp. was incorporated in 2011 and is based in New York, New York.

About Sabra Health Care REIT

As of September 30, 2023, Sabra's investment portfolio included 377 real estate properties held for investment (consisting of (i) 240 Skilled Nursing/Transitional Care facilities, (ii) 43 senior housing communities (Senior Housing – Leased), (iii) 61 senior housing communities operated by third-party property managers pursuant to property management agreements (Senior Housing – Managed), (iv) 18 Behavioral Health facilities and (v) 15 Specialty Hospitals and Other facilities), 12 investments in loans receivable (consisting of two mortgage loans and 10 other loans), five preferred equity investments and two investments in unconsolidated joint ventures. As of September 30, 2023, Sabra's real estate properties held for investment included 37,606 beds/units, spread across the United States and Canada.